mase 72 The angument among accountants and financial statement users for tax purposes, using current values can cause earnings volwer the proper valuation procedures for assets and liabilities atility, and management could use current value to "manage rewulted in the release of SFAS No. 115 (see FASB ASC 320-19). "earnings." The statement requires current-value disclosures for all invest- Required: ments in debt securities and for investments in equity securities that have readily determinable fair values and for which the a. Determine how current values might be determined for investor does not have significant influence. The chairman of investments, land, buildings, equipment, patents, copyrights, the Securities and Exchange Commission termed historical trademarks, and franchises. cost valuations "once-upon-a-time accounting." Historical b. How might the use of current values in the accounting cost accounting also has been criticized as contributing to the records cause earnings volatility? savings and loan crisis of the 1980s. During that period, these c. Discuss how management might manage earnings using financial institutions continued to value assets at historical current cost data. cost when they were billions of dollars overvalued. Critics of d. How do the requirements originally established by SFAS current-value accounting point out that objective market values No. 157 affect the use of fair value measurement in financial for many assets are not available, current values cannot be used statements